Sales

Delivery Challan

A document for transporting goods without a sales invoice

Definition

A delivery challan is a document used to transport goods from one location to another when a tax invoice is not required at the time of movement. Under GST rules in India, a delivery challan is used in situations such as sending goods for job work, transferring stock between your own godowns, sending goods on approval or sale-or-return basis, or supplying liquid gas where the exact quantity is unknown at the time of dispatch. The delivery challan must be issued in triplicate — the original for the buyer, a duplicate for the transporter, and a triplicate retained by the seller. It must contain the date, challan number, sender and receiver details, GSTIN, HSN code, item description, quantity, and the reason for transportation. Delivery challans help businesses stay compliant with transport regulations and serve as proof during transit checks by authorities.

How It Works

  1. 1When you need to move goods without a sale — such as stock transfers, job work, or goods sent on approval — you create a delivery challan instead of a tax invoice.
  2. 2The challan is prepared in triplicate: one copy for the receiver, one for the transporter, and one retained by you as the sender.
  3. 3It includes item details, quantity, value, HSN codes, GSTIN of both parties, and the reason for transport (e.g., branch transfer, job work, approval basis).
  4. 4If the goods value exceeds ₹50,000, an E-Way Bill must also be generated along with the delivery challan for lawful transportation.

Example

You operate a garment business in Surat and send 200 shirts to your branch showroom in Ahmedabad for display. Since this is a stock transfer (not a sale), you issue a Delivery Challan mentioning: 200 cotton shirts, value Rs. 60,000, reason: Branch Transfer. If the goods value exceeds Rs. 50,000, you also generate an E-Way Bill.

How Stock Register Handles This

  • Create delivery challans with auto-filled item details, HSN codes, and party GSTIN for GST-compliant goods movement
  • Track goods sent on approval or for job work with challan-wise reports showing pending and returned items
  • Convert delivery challans into sales invoices once the sale is confirmed, avoiding duplicate data entry
  • Maintain a challan register with serial numbers and dates for easy reference during transport or audit checks

Related Terms

E-Way BillSales Invoice / BillPurchase Order (PO)

Related Guides

Sales Invoice Guide

Frequently Asked Questions

When should I use a delivery challan instead of a sales invoice?

Use a delivery challan when goods are being moved but no sale has taken place yet — for example, stock transfers between your own godowns, sending goods for job work, goods on approval, or samples. Once the sale is confirmed, you issue a proper tax invoice.

Is a delivery challan required for every goods movement?

Under GST, any movement of goods worth more than ₹50,000 requires either a tax invoice or a delivery challan along with an E-Way Bill. For movements below ₹50,000, a challan is still recommended as proof of legitimate transport in case of inspection.

Can I claim GST input credit on a delivery challan?

No, a delivery challan is not a tax invoice, so GST input credit cannot be claimed on it. ITC can only be claimed when a proper tax invoice is issued for the actual sale or supply of goods.

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